Entrepreneurship in the Underground Economy
Chapter 6: Explaining the Hidden Enterprise Culture
INTRODUCTION Conventionally, the existence of the underground economy was often attributed to single causes, such as the level of taxation or the prevalence of very small enterprises. Increasingly, however, it is recognized to be the product of not only a multiplicity of factors but also how these factors variously combine in different populations to produce high or low levels of underground work. A plethora of very small enterprises in an area, for example, is no longer seen as a proxy indicator of a sizeable underground economy. Rather, it is whether a host of other factors also exist and how these factors interrelate, that matter (Mateman and Renooy, 2001; Renooy et al., 2004; Williams, 2004a; Williams and Windebank, 1995a, 1998). In this chapter, this mode of explaining the general underground economy is applied to understanding the existence of a hidden enterprise culture in western economies, by which is meant the prevalence of ﬂedgling underground micro-entrepreneurs and more established self-employed offthe-books workers. To do this, the multiplicity of structural, institutional and individual-level conditions that inﬂuence whether a hidden enterprise culture prevails will be reviewed. Emphasis throughout, moreover, will be on understanding how these structural, institutional and individual-level factors combine together in different populations to produce particular outcomes. As Renooy et al. (2004: 9) put it: There are no general, universal causes for the existence and development of an underground economy. It is brought about by a complex interplay between various variables that varies between countries. Given this recognition that the hidden...
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